There are growing doubts about the regional economic bloc known as the East African Community’s ability to successfully launch a single currency by 2024, a report has said. One of the reasons for this is member states’ delays in meeting targets as set out in the roadmap.
Attainment of Single Regional Currency a Top Priority for the EAC
Central banks from an African economic union, the East African Community (EAC) are reportedly unsure if plans to introduce a single currency for the region by the year 2024 will be realized. The central banks cite some member states’ failure to meet targets as set out in the roadmap as one of the reasons why the single currency is unlikely to take off as planned.
As per a report in the East African, members of the six-nation East African Community hope that the envisaged common currency will help reduce the costs associated with converting currencies. There are also hopes the single currency, whose attainment is one of the EAC’s priorities for the period between 2022 and 2026, will eliminate the exchange rate volatility that comes with cross-border trading.
Meanwhile, in a communique reportedly released on August 22, the EAC confirmed that delays and other challenges meant the regional bloc cannot have a single currency by 2024 as planned.
“The Committee noted that there have been delays in realising targets set out in the EAMU [East African Monetary Union] roadmap and that there are several challenges that could further impede the timely implementation of EAMU protocol. Therefore, the Committee pledged to work with the EAC Secretariat and other stakeholders in the EAC integration process to fast-track pending activities of the EAMU roadmap,” the EAC communique explained.
Harmonization of Monetary and Forex Policies
Still, despite its acknowledgement that the process to establish a single regional currency has been beset by challenges, the EAC nonetheless claimed that partner states’ central banks had achieved some progress.
According to the East African report, some of the central banks’ achievements include the creation of the East African Monetary Union (EAMU) as well as the harmonization of forex and monetary policies.
Other achievements are said to be the harmonization of regulatory regimes, the improvement of cybersecurity frameworks, and the application of measures which strengthen payment systems.